The Business Journal recently convened a gathering of medical device industry leaders for a roundtable discussion at Maschoff Brennan in Salt Lake City. The following text was edited for clarity and length.
What does the future for healthcare and medical devices look like in Utah?
Dustin Williams: We’re in the thick of developing drug-led combination products now, because you have to go with the primary method of action. There’s an interesting trend and push, a heavy push in big companies, device companies, they want to know 510(k) first — where are they going to put their money? And that’s basically their portfolios now — a huge focus on devices.
But there are these outstanding needs. Antibiotics are a good example. I launched Curza 13 years ago. The antibiotic space has been a bear to find funding, although there’s a massive need with antimicrobial resistance going on, getting funding for it is nigh impossible.
We’ve actually had quite a challenge here in Utah getting people in medtech, med devices, to give investments in the life science space, because everybody’s so interested in Silicon Slopes. So I see a lot of these things that play and I think it’ll be an interesting next 10 years to see what the FDA does. Are they going to continue with a lot of the regulations as they are, or will they help things get through?
I think [Utah] is a wonderful place to do business. There is a great community, tremendous support. If you are seeking it, people are willing to help you find the person you need. But if you’re in software and tech, go for it. If you’re in medtech, make sure you’re ready for it.
Nate Gibby: You think in terms of where Utah stacks up nationally when it comes to med devices, we’re No. 8 in terms of total employees in the med device space. And that’s not per capita, that is No. 8. And you think about our population being somewhere in the mid-30s, we punch well above our weight in terms of number of employees. We have Stryker Neurovascular, we have Edwards Life Sciences and Merit Medical, and so we’ve got some pretty big medical device manufacturers.
In terms of where the future is, we also have a lot of great innovation that’s occurring between what’s happening at our universities — CMI is a huge development, BYU is getting more into the game — so we get a lot of these innovations coming out of our universities. One of our challenges is how to match this innovation with the capital that is required to take it to market and successfully commercialize that technology.
In terms of geography, we have more going on here in real estate developments dedicated to the life sciences than potentially anywhere in the country, between what’s going on at our universities, between the inland port, between the Medical Innovation Technology Research campus, the Point, and a couple of our labs, we’ve got a lot going on to try to help build and develop this ecosystem.
Part of the challenge is, how do we match the investment sources with the right opportunity? Do we have the right talent in place? What’s the addressable market? What’s the team like? And sometimes you’ll find that the inventors are not great operators, and vice versa. And so that’s always a challenge, trying to get the right talent in place.
Derek Sakata: If you take the 100,000-foot view of what we need to achieve with medical devices, there’s a futurist by the name of Buckminster Fuller. He states that we need to do more and more with less and less until we can do everything with nothing. So, asymptotically, we’ve got to get to this point where we help our clinicians do this. The statistics are a little concerning because the American Academy of Medical Colleges states that in the next 10 to 20 years, we’ll have a shortage of 110,000 physicians in this country. In my profession alone as an anesthesiologist, in the next 10 years, half of all anesthesiologists in this country will be 55 years and older.
Faith Chamas: Some of the challenge is, how can we get those individuals? Utah, we know there’s capital here, but for them to back that and that runway, knowing it may be 10 to 15 years before that ROI comes in or potentially doesn’t, but taking that risk and showing that there’s still an appetite. Now we have a lot of tech companies coming up with AI — that’s what we’re competing against. Sometimes, time to market or time to fail is faster for them.
What are some of the pros and cons that you see with artificial intelligence and generative AI in the medical device field?
Sakata: AI only knows what it knows from the past. That’s the issue, right?. If you’re extrapolating in the future, it can somewhat come up with that concept a little bit. But it does depend on those of us who are working in these fields to be able to see the future. And especially with something like the Center for Medical Innovation at the University of Utah, very rapid de-risking is kind of what we need to be able to do, and AI probably isn’t quite there yet. …
We need small language models, so more specific to what we’re working on.
Williams: I just appreciate the University of Utah having a responsible AI initiative. There are a lot of concerns out there, and I think some of them are valid. You can use AI for good or bad. So, I like that there’s an initiative and a push to say, “Let’s improve life. Let’s improve all aspects of our workflow.” I think it’s great.
What are the biggest areas for growth in Utah in the next five to 10 years?
Gibby: I can tell you that we’ve got a lot coming in terms of AI with drug discovery. … We need to continue to make these connections happen so that we can not only de-risk on the medical side of things, but also on the commercial and business side of things. Can we do things to connect these device startups with business resources? Between investors, mentoring, and legal resources, earlier on in the process, so that we can kill ideas that need to be killed sooner and/or give resources to the ideas that we really think can succeed?
Chamas: We have the recipe that we should be able to incubate these medical devices. But if you look from a medical device standpoint, there are the Becton Dickinsons, Strykers, already existing large medical device companies that have brought manufacturing here. We have great talent … and we have capital. But the challenge is, why is that not developing that pool? I was involved with the startup last year and the feedback we’re getting is that you need to go to California if you want a medical device to be funded.
And the question for us is, why? We have capital. We have talent. There’s no lack of infrastructure. So I think the question there is, what is that missing link? And maybe we’ve been waiting for CMI to get going so that it can champion that. But that’s what I ask myself, as even I look at opportunities within Utah, is a medical device similar to a Recursion from a therapeutic standpoint. We don’t have that yet, a homegrown medical device.
I think we have all the ingredients; it just hasn’t come together.
Sakata: And these engineers on campus here, the students, they’re super-bright and they want to work on things that matter. We need to reach out to them to get those ideas going. I graduated from Loma Linda University. It does not have anything but medical there. So there again, it’s separate. The University of Utah, I think the way we sell it is, we’ve got everything there. We have a law school. It’s all right there, and you can basically walk to the different areas.
It’s like Utah, New Mexico, Colorado — there are all of these square flyover states. You don’t stop here, but it’s become more of a place that people stop. I think getting the word out and the lifestyle we have here … are some of the things that we could do.
Williams: Health care, life sciences and AI are going to have this really big integration over the next five to 10 years.
The DOD so far has given us $14 million to fund this product, and is filling the gap of having capital. If we didn’t have the DOD funding and that’s what the university’s helping to make a big push of this scale — we’ve got to make sure we get more of this if we can — but they are very product-driven..
What misconceptions do people have about the medical industry in Utah?
Gibby: There are several broken links in the chain. … And one of them is a marketing problem. When Utah is mentioned, everyone has a similar reaction: “Well, why would we expand or invest in Utah?” I think we have to do a better job of telling our story of all of these resources that we have available to us, some of which we’ve already mentioned today.
So one part of it is telling our story.
The other part is bridging the gap between capital that’s there and having investable companies and not only do we have to get investors to look at them, but also we have to better train our early-stage startup companies and Series A and B so that they look more investable.
From a policy standpoint, the good news is our state has really focused on life sciences as one of its core industries of focus. There are four or five of them; we’re one of them. So they’re starting to invest in things like the Utah Innovation Fund, now the Nucleus Grow. The state has put in $4 or $5 million in several different funds.
And I think the last one — this is certainly not exhaustive — but can we find ways to help leverage companies like Stryker to get involved with our small and mid-sized companies to help raise them up. And what does that look like? I don’t know yet. But those are some of the conversations that we’ve got to have to achieve our goal of making Utah the most nutritive place for a life-sciences and/or medical device-specific company.
Chamas: I think Utah has engineers. We’re not very good at marketing ourselves. We could be the smartest engineer, but we just want to sit in the lab, tinker and maybe we miss opportunities because we’re not really talking about the cool things we’re doing. In reaching out to individuals, I’m looking for a niche talent and a lot of the individuals who have the skill set are in Pennsylvania, so I’ll reach out and most of them say, “The role sounds great, but I don’t want to move to Utah.”It goes back to marketing. It’s how do we show the benefits of Utah?
Gibby: With BYU’s medical school also coming online, that’s a big deal. … The president of BYU … talked about how they’re collaborating, how the University of Utah is reaching out to BYU to help them bring that up to speed. And that’s going to play a significant role as well in terms of what we’ve got going on here in the state of Utah to help bring med devices online. Again, the medical school’s part, but can we bridge the gap between what’s going on from a business standpoint and our company and formation and commercialization with what’s going on in academia and really have a center where we may turn Utah into the foremost innovator when it comes to medical innovation. It’s a big challenge. …
And if I might also go back to the FDA, because it has its place and we need it. We all benefit from the FDA. And with cuts earlier this year, a lot of their regulators or account managers … being cut, it’s created a real problem for device manufacturers trying to get their stuff through the FDA. I think some of that’s starting to come back, but we also have the head of the FDA Center for Devices and Radiological Health, CDHR, who is coming to our event in the fall, and we’ve had the person in that chair participate in Utah events for the past four or five years. …
Amanda LeMatty: I moved to Utah five years ago and … chose to come here for a variety of reasons. But I do think that there’s this sentiment of, if you’re not on a coast, you’re somehow living 10 years behind everyone else. With time, the growth that Utah has and then being able to market that to some of these areas that are known as life sciences hubs, Utah will end up being another great place in the U.S. for that.
How do we spread awareness and get startups more involved?
Chamas: I think we need to create more roundtables. I know we’re all busy, but we make time for what’s important. I think we need to find a forum where we bring the interested parties in and show them the importance of this, because the impact of influencing policy is transformational for an organization.
Williams: I had the pleasure of being in the trenches with my students, with development, with the engineers, with our regulatory consultants drafting documents, strategizing, and then I’ve also been on that other side of, what’s the business strategy, what’s the market? So, I am grateful that I’m now getting this experience on all fronts, and I think really moving the needle, the regulatory consultants, I think having some of them at a table or learning, because they’re just in the thick of face-to-face interactions with the FDA.
Sakata: You mentioned getting time; that’s the issue. And I think that’s the issue with CMI with us, because I work 50 hours a week in the operating room. I’m doing all this stuff on the weekends, when I get home, and as I get older, it gets harder to keep my mind going that much. Breaking things into bite-sized pieces. So you’ve got that surgeon who says, “I’ve got this idea.” The way they approached him is the way that Jim McDonald did with me and said, “Hey, we’ve got this DOD grant. It’s due in three weeks.” I’m like, “No way, man. There’s no way we’re going to get that done.” “What I need you to write today is this paragraph. This is what needs to be done. Send that to me. Tomorrow, we’re going to address this [other part].”
Williams: The partnership. I have multiple clinicians. I basically never ask them to write anything other than just to review, but the Ph.D./M.D. partnership has been huge for us, because you need that expertise. As a Ph.D., I don’t appreciate what happens in the clinic firsthand, so I need to have their knowledge base, but they don’t have time to write.
LeMatty: I think that a way to help [startups] and what we’re trying to do at CMI is create a community within the building. So that’s why we have these incubator spaces, these other resources. I think that that’s a big thing that Utah, in particular, does have. With BioUtah and then the events that they host, I’ve gone to every single one since I’ve been here. It’s been a great way to meet different companies, hear about what other people in Utah are doing, and then, with BioHive, it’s another great way to build community.
When do questions about intellectual property come up?
LeMatty: I think it depends on the person. I know for the students I work with, it’s either something they’re thinking about before they even have a device and they just want to have their name on a patent, or it’s something that they don’t really consider until it’s time to make sure that their device is protected before they have a public disclosure. I find it happens at either end. At least for what I do in our program and try to talk about it throughout, IP should be something you are thinking about throughout the development of your design, then figure out the exact time when you need to file to give yourself the most protection for your ideas.
Williams: The University of Utah has a fairly good system. They’re good at getting you a little bit of groundwork laid. But then you basically have to launch a company to license the technology and catalyze it forward. But I think the university does have a mindset of making sure your IP is at the forefront, because if you have an idea and if you’re going to publicly disclose, you need to make sure you’ve got coverage.
Sakata: I think that’s where interfacing with you and others who are in this space is really beneficial. Another thing that was interesting when I first came here was, I explicitly said I wanted to train in anesthesiology, but my main goal is to develop medical devices, so I developed the first one in my senior residency. … The thing about academic promotion, it’s gotten better, but putting stuff into the public domain, as an academic, you’re like, “I got published, I’ve got to speak about this.” It’s like, “No, no, no. No, you don’t. Not yet.” That’s not well known to a lot of our faculty. And to get promoted, they look at, still, how many promotions do you have? How many speaking agents do you have? I don’t have as many as my colleagues who are purely in the educational realm, because even now with their devices, we’re looking for publications, but my name is better not to be on there for any conflict of interest. So, a lot of times, most of the stuff we’re publishing does not have my name on it, and that is counterintuitive to an academic institution.
Williams: I spent 16 years at the VA, and I’m as transparent as can be. I was religious with my conflict-of-interest submissions to the VA and UofU. And nine years after beginning to submit, I got a message from the central office of VA, Washington, D.C.: “Hey, looks like you’re developing a product, and that’s a conflict of interest that we in essence are unwilling to waive. So you either need to get rid of all your equity and all your companies, or you need to no longer do the research you’re doing and shift your focus so you can maintain your equity in your product, or you need to leave the VA.” I left the VA.
The University of Utah is very unique, and kudos to Utah that has built this kind of fusion of being able to invent, create and develop, but also from an R&D perspective, academic faculty perspective, because they allow you to, for as long as you give the conflict of interest, you make it public and it’s known and you have a management plan, which I do, we all do. But I speak with so many of my colleagues elsewhere — I won’t list off places — but they cannot do this. They have to cut their time. If you’re going to be working on that product that has commercialization potential, you cannot be on campus.
Sakata: The patent on the industry side is as important to us on the academic side. It’s like, “Do you have a hypothesis?” Because sometimes people submit stuff, it’s like, “So what’s your hypothesis? Can you build a power analysis on this?” And that on the academic side is hard, so it’s like the same thing in two different realms.
If you were ever king or queen for the day, what would you change about the regulatory environment here in Utah to make it better for you?
Williams: Strongly consider making it a safety-based review instead of having to prove efficacy. Your product, if it’s effective, you can show that, you can publish on it, you can make that happen. Great. But it shouldn’t necessarily be a major hinge point, as far as if the company has something that’s better or if they think they have something that’s better, the market will pan that out. But safety should be a major concern, which it is to a large degree, but you still have to flesh out both. But that safety aspect is, I think, what should be the bigger focus.
Sakata: Ours is more of an issue on the federal rather than the state level that we’ve noticed more than anything else. I do think Utah could probably take a prominent role in discussing things. Mike Leavitt and others passed out of HHS that even with the things that are happening in HHS right now, it’s like, “Could we have a voice from Utah state that, yeah, here’s some of the ideas that we have?” I think that could be really helpful to help influence regulations on the federal side.
Williams: I don’t know that there are grants in this space. I’m not saying the FDA should give grants, but what if there’s a federal grant that can be given to the FDA to remove the cost burden to startups? Because just for a new drug application, it’s $5 million. And that’s just to have the FDA review the NDA. Where in the world do you come up with $5 million from an investor here? The NIH is not going to pay that. They don’t support regulatory fees.
Chamas: I think one of the gaps we have is the lack of cross-pollination between our various industries that we have in Utah. We have a lot of diversity, we have therapeutics, we have medical devices, we have startups, we have tech companies. But there isn’t really a hub where we come and talk about the problems that we have, because that’s really where we are going to get those disruptive technologies coming out of it.
If I were a king or queen one day, I would develop a platform where, IP aside, companies can just have 10 minutes and say, “This is what’s keeping me awake.” It’s not a place for a solution, but this is the problem. And hopefully from that, there’s breakout rooms. If we had a platform like that, amazing things would come out of that. We have a lot of smart people here, a lot of people are doing amazing, cool things across the street from each other, but we’re not sharing those ideas. And just imagine what could come from that.
We have such strong life sciences and medical device technologies here in Utah. What are some of the unique advantages and disadvantages in the state?
Gibby: Our workforce and the talent we have to make it happen [is an advantage], especially with what’s coming out of our universities. We need to do a better job of connecting that talent with real opportunities within businesses. I know several people who are Ph.D.s who can’t get a job here and so we need to fix that. … Lifestyle is huge, but we also need to continue to say, “We have all of the resources for you to be successful. Look at all these innovative things that are going on.” … Connecting the innovation to capital is huge.
I think one of the things that defines Utah is our spirit of collaboration. This goes back to pioneers, when they were trying to get people across the plains and they used the people who were already here to fund those coming across. And so, we think, “How can we facilitate a collaborative environment where we help each other out?” And that’s one of the big questions that we’re wrestling with now, is what does that really look like and how do we do that? …
We need to change that notion of competition versus abundance, scarcity and abundance, because I hear what you’re saying and that’s a real issue, but we think there are enough investors out there, and investors know investors that if it’s not this particular VC firm or private equity group, whatever, that there are others out there that we need to bring to the table. I think one of the big challenges is that we have to let capital sources know that first, we’re on the map and we have these resources. On the flip side, not only do we need to get the capital here, but then we also have to do a better job of preparing our companies to pitch to them and look at the criteria that they’ve got. … I won’t mention names, but we had this happen just two months ago, where we had a company here in Utah that could change the landscape, big time. And their CEO stands up, and he’s talking about very minute scientific issues in front of a bunch of business and government folks, and he’s comparing it to Russia. And we’re listening to this, thinking, “What does this have to do with anything?” You’re better than Russia. Great. I want to be better than Russia, but how is this going to affect us? How will this impact the market? And this company has the potential to do tremendous things, not only in Utah but in the global health care environment. … But short of it is that his inability to talk about the real-world applications in people’s lives is what’s going to continue to cost us and cause us problems. …
Williams: I’ve been on at least 150 pitch calls in the past two to three years. I was part of the MedTech Innovator program … and it is like pulling teeth to get capital here in Utah for medtech. And we haven’t been able to specifically identify why or what, but I’ve asked every possible connection I can. … It’s a challenge. …
Jessica Brown: We’ve talked a lot about innovation and startups and getting these companies going. OK, great, now that you have it, it’s FDA-cleared. What are the challenges that you’re facing getting it to the actual patient and to the consumer? Because that’s what we face a lot. We have this amazing technology, it is FDA-cleared, yet we can’t get every patient to get it because of different regulations … insurance paying for it. So, what has been your guys’ experience with that and how do you regulate that, monitor that, and set those expectations so that you don’t feel defeated when it comes down to actually getting it to the person who, the whole purpose behind this and the whole purpose that you spoke about was to give this to the patient? And you’ve created it, then now what? How do we get it to them?
We had FDA clearance in 2008 for a device as a second line of treatment for adults. We got FDA-cleared last year for kids, 15-to-21-year-olds, as a first line of treatment to treat depression. And yet kids can’t get it and paid for by insurance. We have all this amazing technology and all these wonderful things that we’ve created, but we’ve created them for who? Why can’t we get it to them? ...
[Insurances are] requiring a patient to fail four medications before they can get a non-invasive, non-drug treatment that works and is safe. That’s a big struggle in the medical device industry is actually getting it to the patient.
I’ve had an opportunity to actually sit down with Senator Kwan and she hears it, she sees all these things. But, I think, to your point, it’s just having more roundtable discussions about technology and what it is going to do for people. That’s the ultimate thing that we’re trying to do here: It’s for the person. It’s for that kid. So, that’s the underlying thing for me.
Sakata: We’re going through that with our fourth device right now. Price point? Who’s going to buy this? Why would they buy this? And luckily, I’m the hospital administrator, plus I’m a clinician. So, with my colleague, I’ll say, “OK, let me put my clinician hat on. Safety? Love it. Yeah. Preservation? Love it.” “Now let me put my administrator hat on. So, you want to sell this device to me? Is it safer, but are we having a problem? Why do I need to spend more on this? I’m not hearing anything from the anesthesiologist that we’ve got a problem.” That’s where you kind of get this interplay, which is good. AI is kind of good for that, too. I still think at the University of Utah, I’ve talked about this with my colleagues at the department, one of the gaps we need to [address] is some place where companies that have products can come in and just showcase it, right?
It’s like, “We understand … it’s your company, but we want you to come in with your competitors [and] show it to us. And show it up against Prozac, or whatever else you’re going to do.” And I get half a dozen emails a day of people trying to sell me stuff on the hospital administrator side. I was like, “Next, next, next, next.” But, these are all people who are trying to get the products in. And for all I know there’s some sort of goldmine there, but there is no way in my role at University Health that I can even vet any of this stuff. No idea.
LeMatty: We actually have a new program that is specifically focused on that, which we’ve started in the past six months. It’s called the Clinical Learning and Immersion Program, where companies can come and then actually choose different areas in UofU Health to talk about their devices if they are currently used, and they can come in and ask the people using them, “Hey, tell me what you don’t like. Where can we improve this?” Or if their company is creating devices, come in and do some of those interviews. So, that is something that we are trying to improve specifically at UofU Health.
What are your final comments and suggestions?
Gibby: I just think if we can continue to foster a spirit of collaboration, then we can make a lot of noise and do a lot of good to help patients. And the beautiful thing about our industry is that it’s all about helping the patients, and we can’t lose sight of that. And improving people’s lives. And so long as we do that and we can find innovative ways to work together, we’re going to do a lot of great things.
LeMatty: And Nate said it better than I will, but I think Utah is a great place to be, especially for life sciences, for medical devices. I think we have a lot of growth in the near future and have had growth for the previous years. So, I think that we’re in a good spot. I think that there’s going to be great opportunities in the future and I hope that groups like ours can help people who are trying to do that.
Williams: My thoughts are honestly just, thank you, I’m grateful, first of all, to be here. It’s a good learning experience, good to meet everybody. And good to see what’s going on. As we’ve been part of BioUtah, it’s been wonderful to see the technologies coming out. And I give credit and am super-grateful for our students, my students all in the past, and technicians, and also the business experts. There’s no way you can do this alone. …
Brown: I think the thing that I recognize the most today is the effort that’s made in this industry and the “why” behind it. Sure, there’s money that can be made from a medical device, but everybody who’s kind of been speaking today has always brought it back to the patient, and that’s really been the ultimate goal for today. And I’ve been inspired to hear people talk, because that’s where it’s coming from, which is a place of caring and compassion. Opportunities like this that have been created to have this open forum, a collaboration to help the overall patient, are a pretty cool thing to be a part of.
Sakata: I’m just lucky being here in Utah in the many years I’ve been here. This group is a small subset of what needs to happen. … I’d say the state of Utah is just amazing from the standpoint of both business and innovation. And it’s small enough that you can get to know people, which is really nice. It’s collaborative. … I’m extremely lucky to be here.
Chamas: It’s a license plate: “Life Elevated.” I really believe that we make transformative technologies here. We’re saving lives every day. If we can get better about beating that drum, to really show and champion what we do every day, it’ll really grow us and be a big champion for that cross-pollination. I really want to preach that, let’s start talking to each other, let’s pick up phone calls, let’s grab tea and understand what problems you’re all having, because we don’t have to go anywhere else. We have all the tools we need here to be successful and change Utah and change the globe.